FINRA Series 7 Regulations 2025/2026
Exam Questions and Answers | 100%
Pass
Securities and Exchange Commission (SEC) - 🧠 ANSWER ✔✔>responsible for
supervision of the capital markets
>writes laws that govern the financial markets
>Has the ability to enforce those laws, even if the broker/dealer or associated
person is registered with a self-regulatory authority (SRO).
>Governs publicly traded companies as well as industry professionals
>The Commission can revoke the registration of a broker/dealer, but it has few
punitive powers
>SEC refers criminal cases to the judicial system
,>SEC regulates the SROs and supervises their enforcement responsibilities in both
the OTC and exchange secondary markets
>President of the United States appoints SEC board members for terms of 5 years,
with advice and consent of the U.S. Senate
Securities Exchange Act of 1934 - 🧠 ANSWER ✔✔*Established to regulate the
trading of securities after they have been issued* (secondary market) *and to
regulate exchanges and broker/ dealers*
>When the National Association of Securities Dealers (Now FINRA) was formed,
the SEC received the authority to review FINRA disciplinary actions, disapprove
rulings and suspend or revoke registration for failure to comply with its rules
Financial Industry Regulatory Authority (FINRA) - 🧠 ANSWER ✔✔(Formerly
National Association of Securities Dealers
>The rules and regulations of FINRA are referred to as bylaws, they fall into 4
Main categories:
*Uniform Practice Code (UPC)*
*Conduct Rules*
*Code of Procedure*
, 3
*Code of Arbitration*
>There are also rules establishing the qualifications and registration requirements
of members... *Any broker/dealer who is authorized to transact securities business
in the United States is eligible for FINRA membership, except those who have
been suspended or barred from membership due to securities violations*
Uniform Practice Code (UPC) - 🧠 ANSWER ✔✔>relates to dealings between
member firms, covering all transactions in nonexempt securities while providing
orderly completion of dealer-to-dealer transactions
>addresses how broker/dealers interact with each other and with associated
persons.
>These rules establish standard industry practice for procedures such as regular
way trade settlement, confirmation delivery, filing of forms such as U4s, U5s, and
Form BDs
Conduct Rules - 🧠 ANSWER ✔✔relate to a member firm's dealings with the public
Code of Procedure - 🧠 ANSWER ✔✔*Outlines the procedural process in the event
of violations and complaints*
> it is the section of FINRA By-Laws that concerns the handling of securities
violations and complaints
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
PRIVACY STATEMENT. ALL RIGHTS RESERVED
, > A customer with a complaint against a member firm or its personnel may submit
a written compliant to any *Department of Enforcement (DOE)*, The *Board of
Governors* may also file a complaint with the DOE
> DOE has the initial jurisdiction for handling complaints
Code of Arbitration - 🧠 ANSWER ✔✔*The purpose of arbitration is to settle inter-
industry disputes* (Ex: One member firm against another, or against a bank, or a
transfer agent)
> It is the section of FINRA By-Laws that is concerned with settling disputes
between dealers and brokers
> Arbitration provides a *cost-effective* method through which disputes are
typically *settled much sooner* than they would be if pursued through the courts
By-Laws define a registered broker/dealer as - 🧠 ANSWER ✔✔a firm who is
registered with the Commission under the Act of '34. It further defines an
associated person as
*>An individual registered under the rules of FINRA*
*>An individual who is directly or indirectly controlled by a member firm,
regardless if the person is registered *
Exam Questions and Answers | 100%
Pass
Securities and Exchange Commission (SEC) - 🧠 ANSWER ✔✔>responsible for
supervision of the capital markets
>writes laws that govern the financial markets
>Has the ability to enforce those laws, even if the broker/dealer or associated
person is registered with a self-regulatory authority (SRO).
>Governs publicly traded companies as well as industry professionals
>The Commission can revoke the registration of a broker/dealer, but it has few
punitive powers
>SEC refers criminal cases to the judicial system
,>SEC regulates the SROs and supervises their enforcement responsibilities in both
the OTC and exchange secondary markets
>President of the United States appoints SEC board members for terms of 5 years,
with advice and consent of the U.S. Senate
Securities Exchange Act of 1934 - 🧠 ANSWER ✔✔*Established to regulate the
trading of securities after they have been issued* (secondary market) *and to
regulate exchanges and broker/ dealers*
>When the National Association of Securities Dealers (Now FINRA) was formed,
the SEC received the authority to review FINRA disciplinary actions, disapprove
rulings and suspend or revoke registration for failure to comply with its rules
Financial Industry Regulatory Authority (FINRA) - 🧠 ANSWER ✔✔(Formerly
National Association of Securities Dealers
>The rules and regulations of FINRA are referred to as bylaws, they fall into 4
Main categories:
*Uniform Practice Code (UPC)*
*Conduct Rules*
*Code of Procedure*
, 3
*Code of Arbitration*
>There are also rules establishing the qualifications and registration requirements
of members... *Any broker/dealer who is authorized to transact securities business
in the United States is eligible for FINRA membership, except those who have
been suspended or barred from membership due to securities violations*
Uniform Practice Code (UPC) - 🧠 ANSWER ✔✔>relates to dealings between
member firms, covering all transactions in nonexempt securities while providing
orderly completion of dealer-to-dealer transactions
>addresses how broker/dealers interact with each other and with associated
persons.
>These rules establish standard industry practice for procedures such as regular
way trade settlement, confirmation delivery, filing of forms such as U4s, U5s, and
Form BDs
Conduct Rules - 🧠 ANSWER ✔✔relate to a member firm's dealings with the public
Code of Procedure - 🧠 ANSWER ✔✔*Outlines the procedural process in the event
of violations and complaints*
> it is the section of FINRA By-Laws that concerns the handling of securities
violations and complaints
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
PRIVACY STATEMENT. ALL RIGHTS RESERVED
, > A customer with a complaint against a member firm or its personnel may submit
a written compliant to any *Department of Enforcement (DOE)*, The *Board of
Governors* may also file a complaint with the DOE
> DOE has the initial jurisdiction for handling complaints
Code of Arbitration - 🧠 ANSWER ✔✔*The purpose of arbitration is to settle inter-
industry disputes* (Ex: One member firm against another, or against a bank, or a
transfer agent)
> It is the section of FINRA By-Laws that is concerned with settling disputes
between dealers and brokers
> Arbitration provides a *cost-effective* method through which disputes are
typically *settled much sooner* than they would be if pursued through the courts
By-Laws define a registered broker/dealer as - 🧠 ANSWER ✔✔a firm who is
registered with the Commission under the Act of '34. It further defines an
associated person as
*>An individual registered under the rules of FINRA*
*>An individual who is directly or indirectly controlled by a member firm,
regardless if the person is registered *
